American Water Files PaPUC Regulatory Settlement for Proposed Merger with Essential Utilities

Event Overview

On September 15, 2026, American Water Works Company, Inc. (NYSE: AWK), along with its acquisition subsidiary Alpha Merger Sub, Inc. and Essential Utilities, Inc., filed a joint petition for a non-unanimous settlement agreement in their pending proceeding before the Pennsylvania Public Utility Commission (PaPUC).

Key Settlement Details

• Parties to the Settlement: The agreement was entered into with key regulatory stakeholders, including:
  • The PaPUC Bureau of Investigation and Enforcement (BIE)
  • The Office of the Consumer Advocate (OCA)
  • The Office of the Small Business Advocate (OSBA)
  • Certain other participating parties to the proceeding
• Non-Unanimous Nature: One or more parties to the proceeding chose not to join the settlement agreement.
• Procedural Next Steps:
  1. The Settlement Agreement will be reviewed by the assigned Administrative Law Judges (ALJs).
  2. The ALJs will issue a Recommended Decision to the PaPUC.
  3. The PaPUC Commissioners will conduct a final review and vote on whether to approve the settlement and the merger.

Background on the Transaction

The parties entered into a definitive Agreement and Plan of Merger on October 26, 2025, under which Essential Utilities will merge with Alpha Merger Sub, Inc. and survive as a direct, wholly owned subsidiary of American Water Works.

Market and Strategic Implications

• Regulatory Clearance Progress: Securing buy-in from Pennsylvania's statutory consumer and small business advocates is a critical de-risking milestone in utility rate-regulated mergers.
• Approval Path: While non-unanimous, broad support among core regulatory advocates improves the probability of receiving favorable ALJ and PaPUC determinations, moving the transaction closer to its ultimate closing.